Harare – Border Timbers, a Rift Valley company involved in forestry, saw-milling and treated pole business in the Eastern Highlands of Zimbabwe reported a positive improvement in its revenue to ZWL$32.0 million in the 11 months to 31 May 2019, reflecting an increase of 67% from ZWL$19.2 million recorded in the same period last year.
In a trading update for the period under review, the company’s Judicial Manager Peter Bailey said the improvement in revenue was mostly driven by improved quality hence better average selling prices (ASP) on lumber.
Lumber production was however lower at 53 146 cubic metres compared to the same period last year recorded at 53 699 cubic metres due to low production in the months of December 2018 to April 2019 at one of the company’s sawmills caused mainly by the general power outages and Cyclone Idai devastating effects.
“The knock-on effect of the cyclone resulted in the Charter sawmill resuming operations in the first week of May 2019, thereby negatively affecting both production and sales into the market as the road infrastructure was decimated,” Bailey said.
“However, sales volume is higher due to increased demand on the local and export markets.
Higher sales volume was achieved out of sales from buffer stock.”
The production and sales of treated poles declined compared to the period ending May 2018 resulting from a general slowdown in the export markets as these are tender based.
The company’s net loss before tax widened by 270% during the period under review to ZWL$9.9 million from ZWL$2.7 million in the prior period as a result of unrealised exchange losses on foreign debts amounting to ZWL$10.8 million.
Bailey said the loss recorded during the review period excludes the effects of the final biological asset valuation which will be conducted at year end.
Border Timbers operates 5 Estates all located in the Eastern Highlands namely Charter, Tilbury Sawerombe, Imbeza and Shamba.
The company was placed under judicial management in 2016 after failing to meet financial obligations amounting to $20 million due to several financial institutions.
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Raynold Mhotseka is a Journalism and Media Studies student at the University of Zimbabwe. He serves as a news writer at financial research firm, Equity Axis where he is currently on attachment. He can be contacted through the following email links, firstname.lastname@example.org and email@example.com.